The officials, including one of the highest ranking officials in the MoD, believed the matter could be dealt with internally without the weapons expert being publicly identified.
Among those involved in the crucial MoD meetings were Hoon; Sir Kevin Tebbit, the permanent secretary; Pam Teare, the director of news, and Richard Hatfield, the personnel director. However, there were also constant telephone calls from Downing St - including, it is claimed, Alastair Campbell, the director of communications. MoD sources confirmed that No 10 demanded, and was told, Kelly's name.
Asked yesterday if Campbell was consulted about the release of Kelly's name, Prime Minister Tony Blair's official spokesman said: "We were consulted and the MoD were the lead department and remained the lead department."
The officials who expressed doubts were told that Downing St had authorised that Kelly's identity could be confirmed by the MoD press office if the media put his name to the MoD.
Whitehall sources said the MoD officials stressed that Kelly had been guaranteed anonymity in return for his cooperation. They pointed out Government lawyers had concluded that his meeting with Gilligan did not warrant prosecution under the Official Secrets Act or dismissal. The consensus was that the likely penalty would be no more than a verbal warning - which Kelly was given.
Under these circumstances, the MoD officials argued that it would be unfair to name him, or force him to face the Foreign Affairs Committee.
According to Whitehall sources, the counter-argument was that Kelly's association with a number of journalists meant it was only a matter of time before his identity became known. It was also pointed out that keeping him away from the Foreign Affairs Committee would leave the MoD open to charges of a cover-up.
Blair was criticised yesterday after he limited the inquiry into the death of Kelly so it could not address the case for war and the Government's use of intelligence about Iraq's weapons of mass destruction.
Lord Hutton, the senior Law Lord who will carry out the inquiry, sought to show his independence by saying that he would decide the matters he would investigate. However, he conceded that these matters would have to be within his terms of reference - "urgently to conduct an investigation into the circumstances surrounding [Kelly's] death".
Asked if he would support Lord Hutton if he tried to broaden the scope of the inquiry into the case for war with Iraq, Blair replied: "I think it's important that he does what we've asked him to do. I don't think it would be sensible to do any more."
Blair's officials made clear the investigation would not look into "policy issues" about the war, because they were being probed by the Foreign Affairs Select Committee and the Parliamentary Intelligence and Security Committee.
Oliver Letwin, the shadow Home Secretary, said the Tories had confidence in Lord Hutton, but added: "We still think it is very regrettable that the Prime Minister has limited the scope of his inquiry in the way he has and we would much prefer to see, following on from this initial investigation, a wider inquiry."
Glenda Jackson, a former Labour minister, said the inquiry would not be wide-ranging enough because it would not address why Britain went to war.
"If this is a very narrow inquiry, the underlying questions - which I think had a contributory part to play in this terrible, terrible tragedy - are still waiting there to be answered and it is clearly the Government's duty to answer them."
Robin Cook, a former Foreign Secretary, said: "I think it would have been much better if the Government had responded two months ago and set up a judicial inquiry into the full facts of the case then. The history of the last two months might have been very different if they had."
He said it would be impossible to investigate Kelly's death without probing "prior issues" such as the Government's dossier issued last September.
- INDEPENDENT
British Parliament Foreign Affairs Committee transcript:
Evidence of Dr David Kelly
Key players in the 'sexed-up dossier' affair
Herald Feature: Iraq
Iraq links and resources